November 2003
Can Bombay sustain boomtime?
?India may well be the second-fastest growing economy in the
world this year, after China. Government, independent think-tanks and
investment banks agree that GDP will grow by close to 7% this year.
Moody's put India's foreign currency sovereign rating on review
for a possible upgrade from sub-investment status in early October,
citing its foreign exchange reserves of over $90 billion.
Foreign investors have put over $5 billion into India this year, 80% of which
is in Indian stocks, pushing the Bombay Stock Exchange Sensex up 56% since
April. Only $740 million came from foreign investors in 2002. The rush into
India began in May and portfolio investment peaked in mid-October, before
correcting sharply on October 23.
Indian companies have restructured and domestic consumption is expected to grow
from $250 billion to $510 billion in the next five years. New sectors have
appeared. Insurance is open to foreigners and outsourcing...
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